Market News
Soybeans roar back, corn up
Soybeans were sharply higher on commercial and technical buying. Beans bounced back from Tuesday’s losses, and then some, with help from higher moves in bean meal and crude oil. Beans are monitoring weather conditions in South America, expecting further crop losses. The recent decline in production projections has boosted export demand for U.S. beans, with the USDA’s weekly numbers out Thursday morning. Wednesday, China bought 132,000 tons of new crop U.S. soybeans, the tenth announced purchase of U.S. soybeans this month, mostly to China or unknown destinations. Unknown destinations will likely turn out to be soybeans when it’s time for delivery. There is talk from Chinese media that Beijing could slash soybean imports and further reduce soybean meal use in livestock feeding to cut dependence on foreign suppliers. Soybean meal and oil were both up solidly Wednesday on commercial demand and anticipation of more crop loss in Argentina, the world’s biggest exporter of soybean products. Paraguay, the world’s fourth biggest exporter of beans, might have to import beans to meet its domestic crush needs.
Corn was higher on commercial and technical buying. Corn bought back a chunk of Tuesday’s losses, also receiving some help from crude oil and bean meal. Most near-term forecasts have some rain in South America, favoring southern Brazil over most of Argentina, but overall conditions will remain dry. The trade continues to monitor Brazil’s soybean harvest, as that nation’s critical second corn crop is planted after beans in central and southern growing areas. The USDA’s next set of production projections is out March 9th, with CONAB’s updated outlook for Brazil scheduled for March 10th. The U.S. Energy Information Administration says ethanol production last week averaged 1.009 million barrels a day, up 15,000 on the week and 98,000 on the year, with stocks of 25.483 million barrels, an increase of 684,000 from the previous and 1.186 million from this time last year. Ethanol futures were unchanged.
The wheat complex was mostly firm with Chicago and Kansas City up and Minneapolis narrowly mixed. Wheat is waiting for any new developments in the Black Sea region, which continues to be a volatile situation. Russia says it intends to move troops away from the border with Ukraine, but nothing has happened yet. That instability in the Black Sea region has also played a role in the higher moves in crude oil, the soy complex, and corn. Near-term forecasts for most of the U.S. Plains generally remain dry, with precipitation this week likely to miss some of the drier areas. Medium-term outlooks have a little more hope, but nothing considered to be drought busting. That’s impacting winter wheat quality and could limit spring wheat planted area in parts of the northern and northwestern U.S. Plains and Canada. Winter wheat growing areas of the eastern Midwest are expected to see rain and snow, but parts of that region already have excessive soil moisture.
